QuickLogic Announces Second Quarter Results - Revenue Increases 14% Year-Over-Year and Profitability Continues

SUNNYVALE, Calif.—(BUSINESS WIRE)—July 27, 2005— QuickLogic Corporation (NASDAQ: QUIK), the inventor and pioneer of Embedded Standard Products (ESPs), today announced its financial results for the second quarter ended June 30, 2005.

Revenue for the second quarter of 2005 was $12.8 million, up 14% from $11.2 million in the second quarter of 2004, and up 2% from $12.5 million in the first quarter of 2005. ESP and Advanced ESP products contributed 41% of revenue in the second quarter of 2005, up from 32% of revenue in the first quarter of 2005. Under generally accepted accounting principles (GAAP), net income for the second quarter of 2005 was $320,000, or $0.01 per share, including a $1.5 million write-down of our investment in Tower Semiconductor Ltd. This compares with a net loss of $529,000, or a net loss of $0.02 per share, in the second quarter of 2004, and with net income of $864,000, or $0.03 per share, in the first quarter of 2005.

Excluding the effect of the investment write-down, non-GAAP net income for the second quarter of 2005 was $1.8 million, or $0.06 per diluted share, compared with non-GAAP net loss of $529,000, or a net loss of $0.02 per share, in the second quarter of 2004, and with non-GAAP net income of $864,000, or $0.03 per diluted share, in the first quarter of 2005.

QuickLogic reports net income or loss in accordance with GAAP and additionally on a non-GAAP basis to highlight infrequent or non-recurring expense the Company may incur from time to time. Non-GAAP results for the second quarter of 2005 exclude write-downs of the Company's investment in Tower Semiconductor Ltd. There was no difference between GAAP and non-GAAP net income or loss in the first quarter of 2005 or in the second quarter of 2004.

"We are very pleased with our second quarter financial results. Our revenue, gross margin percentage and non-GAAP net income were the highest they have been since 2000," said E. Thomas Hart, chairman, president and CEO. "We were profitable for the second quarter in a row and cash increased to $25.1 million during the quarter. In addition, our low power Eclipse II and QuickPCI II solutions have continued strong design-in activity, especially for micro hard drive and WiFi bridging applications."

Conference Call

QuickLogic will hold a conference call at 2:30 pm Pacific Time today, July 27, 2005, to discuss the second quarter financial results. To participate, please call 1-866-700-0161 or 1-617-213-8832 (international) by 2:20 p.m. Pacific Time on July 27, 2005. You will need to reference the pass code: 35926789. A live webcast of the conference call will be available via the investor relations page of the company's website at www.quicklogic.com. A recording of the call will be available starting one hour after completion of the call. To access the recording, please call 1-888-286-8010 or 1-617-801-6888 (international). You will need to reference the pass code: 17940220. Both the webcast and the call recording will be archived until August 10th, 2005.

About QuickLogic

QuickLogic Corporation (NASDAQ: QUIK) invented and has pioneered the Embedded Standard Product (ESP) architecture, with the introduction of first products in 1998. ESPs are semiconductor devices that deliver the guaranteed performance, lower cost and lower risk of standard products, coupled with the flexibility and time-to-market benefits of programmable logic. QuickLogic's proprietary ViaLink metal-to-metal interconnect technology offers significant benefits - including very low power at high performance levels - to our customers and is the foundation of our ESP product families, as well as our core FPGA products. Founded in 1988, the company is located at 1277 Orleans Drive, Sunnyvale, CA 94089-1138. For more information, please visit the QuickLogic web site at www.quicklogic.com.

Non-GAAP Financial Measures

QuickLogic reports financial information in accordance with generally accepted accounting principles (GAAP), but believes that non-GAAP financial measures are helpful in evaluating its operating results and comparing its performance to comparable companies. Accordingly, the Company also uses calculations of (i) non-GAAP net income (loss), which represents net income (loss) excluding the effect of write-downs of the Company's investment in Tower Semiconductor Ltd.; and (ii) non-GAAP net income (loss) per share, which represents basic and diluted net income (loss) per share excluding write-downs of the Company's investment in Tower Semiconductor Ltd. The Company provides this non-GAAP information to enable investors to evaluate its operating results in a manner similar to how the Company analyzes its operating results and to provide consistency and comparability with similar companies in the Company's industry. Investors should note, however, that the non-GAAP financial measures used by the Company may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. The Company does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures alone or as a substitute for financial information prepared in accordance with GAAP. A reconciliation of GAAP net income (loss) to non-GAAP net income (loss) is included in the financial statements portion of this release. Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements made by our CEO relating to design activity of our new products and the revenue generating potential of such new products, which is dependent on the market acceptance of our products and the level of customer orders. Actual results could differ materially from any such forward-looking statements. Factors that could cause actual results to differ materially include our ability to replace pASIC1 and pASIC2 revenue, which we expect to decline substantially due to end-of-life purchases of such products; delays in the market acceptance of the Company's ESPs or new products; our ability to convert new design opportunities into customer activity; the level and timing of customer design activity; the market acceptance of our customers' products; changes in our customers' objectives; the risk that new orders may not result in revenue in 2005 or thereafter; our ability to introduce and produce new products based on advanced wafer technology on a timely basis; our ability to adequately market the low power, competitive pricing and short time-to market of our new product families; intense competition, including the introduction of new products by competitors; our ability to hire and retain qualified personnel; unforeseen changes in product demand or supply; and general economic conditions. These factors and others are described in more detail in the Company's public reports filed with the Securities and Exchange Commission, including the risks discussed in the "Risk Factors" section in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the Company's prior press releases.

The QuickLogic name and logo are registered trademarks of QuickLogic Corporation. All other brands or trademarks are the property of their respective holders and should be treated as such.
                        QUICKLOGIC CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)
                             (Unaudited)

                          Three Months Ended         Six Months Ended
                    ------------------------------ -------------------
                     June 30,  June 30,  March 31,  June 30,  June 30,
                      2005      2004       2005      2005      2004
                    --------- --------- ---------- --------- ---------
Revenue             $ 12,770  $ 11,221  $  12,527  $ 25,297  $ 21,589
Cost of revenue        4,614     4,465      4,888     9,502     9,020
                     --------  --------  ---------  --------  --------
Gross profit             8,156          6,756            7,639        15,795        12,569
Operating  expenses:
      Research  and
        development                2,334          3,052            2,454          4,788          6,300
      Selling,  general
        and
        administrative          4,042          4,194            4,298          8,340          8,103
                                          --------    --------    ---------    --------    --------
              Total
                operating
                expenses              6,376          7,246            6,752        13,128        14,403
                                          --------    --------    ---------    --------    --------
Income  (loss)  from
  operations                        1,780            (490)              887          2,667        (1,834)
Write-down  of
  marketable
  securities                      (1,466)              --                  --        (1,466)              --
Interest  expense                  (53)            (62)              (53)          (106)          (130)
Interest  income  and
  other,  net                              90                23                  80              170                67
                                          --------    --------    ---------    --------    --------
Income  (loss)
  before  income
  taxes                                      351            (529)              914          1,265        (1,897)
Provision  for
  income  taxes                          31                --                  50                81                --
                                          --------    --------    ---------    --------    --------
Net  income  (loss)      $        320    $      (529)  $          864    $    1,184    $  (1,897)
                                          ========    ========    =========    ========    ========

Net  income  (loss)
  per  share:
      Basic                        $      0.01    $    (0.02)  $        0.03    $      0.04    $    (0.08)
                                          ========    ========    =========    ========    ========
      Diluted                    $      0.01    $    (0.02)  $        0.03    $      0.04    $    (0.08)
                                          ========    ========    =========    ========    ========
Weighted  average
  shares:
      Basic                            26,747        25,231          26,385        26,566        25,039
                                          ========    ========    =========    ========    ========
      Diluted                        27,921        25,231          27,413        27,678        25,039
                                          ========    ========    =========    ========    ========


                                                QUICKLOGIC  CORPORATION
              NON-GAAP  CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
                              (In  thousands,  except  per  share  amounts)
                                                          (Unaudited)

                                                  Three  Months  Ended                  Six  Months  Ended
                                      ------------------------------  --------------------
                                        June  30,    June  30,    March  31,    June  30,      June  30,
                                          2005            2004              2005              2005            2004
                                      ---------  ---------  ----------  ----------  ---------
Revenue                        $  12,770    $  11,221    $    12,527    $    25,297    $  21,589
Cost  of  revenue              4,614          4,465            4,888            9,502          9,020
                                        --------    --------    ---------    ---------    --------
Gross  profit                    8,156          6,756            7,639          15,795        12,569
Operating
  expenses:
      Research  and
        development              2,334          3,052            2,454            4,788          6,300
      Selling,
        general  and
        administrative        4,042          4,194            4,298            8,340          8,103
                                        --------    --------    ---------    ---------    --------
              Total
                operating
                expenses            6,376          7,246            6,752          13,128        14,403
                                        --------    --------    ---------    ---------    --------
Income  (loss)  from
  operations                      1,780            (490)              887            2,667        (1,834)
Interest  expense                (53)            (62)              (53)            (106)          (130)
Interest  income
  and  other,  net                    90                23                  80                170                67
                                        --------    --------    ---------    ---------    --------
Income  (loss)
  before  income
  taxes                                1,817            (529)              914            2,731        (1,897)
Provision  for
  income  taxes                        31                --                  50                  81                --
                                        --------    --------    ---------    ---------    --------
Net  income  (loss)    $    1,786    $      (529)  $          864    $      2,650    $  (1,897)
                                        ========    ========    =========    =========    ========

Net  income  (loss)
  per  share:
      Basic                      $      0.07    $    (0.02)  $        0.03    $        0.10    $    (0.08)
                                        ========    ========    =========    =========    ========
      Diluted                  $      0.06    $    (0.02)  $        0.03    $        0.10    $    (0.08)
                                        ========    ========    =========    =========    ========
Weighted  average
  shares:
      Basic                          26,747        25,231          26,385          26,566        25,039
                                        ========    ========    =========    =========    ========
      Diluted                      27,921        25,231          27,413          27,678        25,039
                                        ========    ========    =========    =========    ========


                                                QUICKLOGIC  CORPORATION
                    GAAP  AND  NON-GAAP  NET  INCOME  (LOSS)  RECONCILIATION
                                                        (In  thousands)
                                                          (Unaudited)

                                                  Three  Months  Ended                  Six  Months  Ended
                                      ------------------------------  --------------------
                                        June  30,    June  30,    March  31,    June  30,      June  30,
                                          2005            2004              2005              2005            2004
                                      ---------  ---------  ----------  ----------  ---------
GAAP  net  income
  (loss)                        $        320    $      (529)  $          864    $      1,184    $  (1,897)
Charges  excluded
  from  non-GAAP  net
  income  (loss):
      Write-down  of
        investment  in
        Tower
        Semiconductor
        Ltd.                            1,466                --                  --            1,466                --
                                        --------    --------    ---------    ---------    --------
Non-GAAP  net
  income  (loss)          $    1,786    $      (529)  $          864    $      2,650    $  (1,897)
                                        ========    ========    =========    =========    ========


                                                QUICKLOGIC  CORPORATION
                                CONDENSED  CONSOLIDATED  BALANCE  SHEETS
                                                        (In  thousands)
                                                          (Unaudited)

                                                                                            June  30,        December  31,
                                                                                              2005                  2004(a)
                                                                                      -------------  -------------
                                    ASSETS

Current  assets:
      Cash  and  cash  equivalents                              $          25,108    $          24,914
      Short-term  investment  in  Tower
        Semiconductor  Ltd.                                                        1,047                  2,022
      Accounts  receivable,  net                                              6,502                  4,786
      Inventory                                                                            8,587                  6,741
      Other  current  assets                                                      1,053                  1,506
                                                                                        ------------    ------------
              Total  current  assets                                            42,297                39,969
Property  and  equipment,  net                                              4,719                  5,403
Investment  in  Tower  Semiconductor  Ltd.                            526                  1,017
Other  assets                                                                            4,338                  4,552
                                                                                        ------------    ------------

TOTAL  ASSETS                                                              $          51,880    $          50,941
                                                                                        ============    ============

      LIABILITIES  AND  STOCKHOLDERS'  EQUITY

Current  liabilities:
      Revolving  line  of  credit                                $            2,000    $            2,000
      Trade  payables                                                                  3,295                  4,119
      Accrued  liabilities                                                        2,021                  2,511
      Deferred  income  on  shipments  to
        distributors                                                                    1,992                  1,667
      Current  portion  of  debt  and  capital
        lease  obligations                                                          1,736                  2,286
                                                                                        ------------    ------------
              Total  current  liabilities                                  11,044                12,583
                                                                                        ------------    ------------

Long-term  liabilities:
      Debt  and  capital  lease  obligations,
        less  current  portion                                                        766                  1,036
      Deferred  royalty  revenue                                              1,296                  1,156
                                                                                        ------------    ------------
      Total  long-term  liabilities                                        2,062                  2,192
                                                                                        ------------    ------------
              Total  liabilities                                                  13,106                14,775
                                                                                        ------------    ------------

Stockholders'  equity:
      Common  stock,  at  par  value                                                27                        26
      Additional  paid-in  capital                                      157,260              155,837
      Accumulated  deficit                                                  (118,513)          (119,697)
                                                                                        ------------    ------------
              Total  stockholders'  equity                                38,774                36,166
                                                                                        ------------    ------------

TOTAL  LIABILITIES  AND  STOCKHOLDERS'  EQUITY  $          51,880    $          50,941
                                                                                        ============    ============

(a)  Derived  from  the  December  31,  2004  audited  balance  sheet  included
        in  the  2004  Annual  Report  on  Form  10-K  of  QuickLogic  Corporation.


                                                QUICKLOGIC  CORPORATION
                                                    SUPPLEMENTAL  DATA
                                                          (Unaudited)

                                                  Percentage  of  Revenue        Change  in  Revenue
                                                -----------------------  ----------------------
                                                    Q2            Q2            Q1        Q1  2005  to    Q2  2004  to
                                                  2005        2004        2005          Q2  2005        Q2  2005
                                                -------  -------  -------  -----------  ----------
COMPOSITION  OF  REVENUE

Revenue  by  product  (b):
  Mature  products                        59%          60%          68%              (11)%                12%
  Embedded  standard
    products                                    27%          31%          19%                  44%              (1)%
  Advanced  embedded
    standard  products                  14%            9%          13%                  10%                74%

Revenue  by  geography:
  North  America                            55%          52%          52%                    6%                20%
  Europe                                          17%          22%          25%              (29)%              (9)%
  Japan                                            16%          13%          17%                (3)%                37%
  Rest  of  world                            12%          13%            6%                114%                  5%

Revenue  by  end-customer
  segment:
  Instrumentation  and
    test                                            48%          46%          54%                (9)%                18%
  Datacom  and  telecom                19%          21%          17%                  10%                  1%
  Military  and  aerospace
    systems                                      17%            9%          14%                  24%              113%
  Computing                                    11%          11%            8%                  37%                20%
  Graphics  and  imaging                5%          13%            7%              (22)%            (55)%

(b)  Mature  products  include  pASIC1,  pASIC2  and  pASIC3  product
        families.  Embedded  standard  products  include  the  QuickRAM,
        QuickPCI,  QuickDSP,  QuickFC,  and  V3  product  families.  Advanced
        embedded  standard  products  include  our  Eclipse,  Eclipse  II,
        QuickPCI  II  and  QuickMIPS  product  families,  as  well  as  programming
        hardware  and  software.
 


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